Mergers and Acquisitions:
Telecom industry now becomes very attractive in terms of mergers and acquisitions. Telecom industry now a days is the fastest growing industry all over the world. In this industry deals with several types of communication medium like fixed line phones, mobile phones ,internet and broad band services .Through mergers and acquisition domestic telecommunication cut down their expenses and they achieve greater market share. Many Telecommunication service provider take mergers and acquisition for growing globally. In the telecommunication sector the growth of mergers and acquisition boosted by the private sector investment and FDI.
The main reason for rapid growth of telecom industry through mergers and acquisition are: first of all deregulation ,second one is wireless land phone services and finaly the last one is innovative products like internet, broadband and cable services.
In India, mergers and acquisition in telecom industry increases from the mid of 1990s.In developed country like US, the mergers acquisitions in this sector is going in the full-fledged manner.
The telecommunication industry mergers and acquisitions completely controlled and supervised by the TRAI (Telecom regulatory authority of India).TRI always keep a tab on the telecom industry so that no monopoly formed.
The following are the mergers and acquisitions took place in the telecommunication sector:
All Tata tele services under Tata DOCOMO:
Under Tata DOCOMO all the services of telephony provider Tata Teleservices Limited (TTSL) including Tata indicom, Tata walky and Tata photon are comes. The company will provide the CDMA and GSM platforms. Due to this merger all the customer of Tata indicom migrated to Tata DOCOMO. The migrati...
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...Import Intensity:
2005 2006 2007 2008 2009 2010 2011
Bharti 28.53 20.85 23.08 25.55 15.78 9.72 9.96 reliance 23.59 7.26 45.63 76.00 6.15 1.69 0.00
Vodafone 22.03 30.23 40.75 26.57 23.20 13.22 15.33
Idea 16.23 16.92 21.75 24.32 19.99 17.72 11.07
Bsnl 1.75 2.95 1.63 1.26 4.14 4.64 1.70
Import Intensity (%) = Total Forex Spending / Net Sales
From the above graph it is visible that:
Import intensity for Reliance goes down from year 2005 to year 2006, later in the year 2007 and 2008 it increases and then again it goes down in the year 2009.
In case of BSNL we can see that the import intensity was negligible up to year 2008 and later it increases but very less as compared to other service providers.
Note: From the import and export intensity of BSNL it is visible that its operations are mostly internal to the country. BSNL neither Imports more nor exports more.
On August 15, Google declared its intentions on procuring Motorola Mobility (MMI), centered in Libertyville, Illinois, for $40 per share or a collective sum of about $12.5 billion. The business deal gave a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was approved unanimously by the boards of directors of both companies.
False. Under typical circumstances, which is to say, if government regulators were not involved, we might expect for the industry to coalesce around one dominant competitor; however, as it is, there are anti-trust statutes preventing such a merger, and therefore it is likely there remain a few major competitors in the space who consume 80-90% of the market share with the remaining share going to a few minor competitors for whom the major players are legally required to provide network bandwidth. Also, there is some differentiation of product, e.g. CDMA vs GSM, that allows for the development of two networks within the market and increases switching costs for the customer, such that they are relatively sticky
In a competitive environment where market is changing instantly, organizations are in a fix to design a strategy that could market their products enticing the consumers to buy their products and services. Market is the arena for business gladiators who fight out for maximum share and profitability and this is possible only through effective marketing strategy. Competing in present economy means finding ways to break out of commodity status to meet customers’ needs better than competing firms (Ferrell and Hartline, 2010). The intensity of competition has increased after the introduction of media and internet where the companies present their product in the best way through advertisements, product reviews, blog entries, etc. With the advancement in technological innovations, companies have found various ways of providing services to the consumers in a cheaper and effective way and this has resulted in communication revolution in late 1990’s as the cellular technology was unfold in most of the regions. Singtel Optus Pty Limited (Optus) is one such company that has evolved during this period as a leader in integrated communications and this paper is assumed to make an analysis of the company’s marketing strategy and its financial position in the market industry.
In fact, some of the biggest threats to the company’s growth are the government’s regulation that increases the risk to the underlying business. In addition, the risk of losing the exclusive contract for the iPhone would be a major loss for AT&T. Most of the consumers choose AT&T because of their exclusive contract for the iPhone. Hence, this loss of business will significantly influence the AT&T's profitability and revenue. Moreover, the antitrust authorities play an important role on approved the merger of AT&T.
Years later, the Telecommunication Act of 1996 triggered dramatic changes in the competitive landscape. SBC Communications Inc. established itself as a global communications provider by acquiring Pacific Telesis Group and becoming the new AT&T. The merger of AT& T and BellSouth, along with the ownership consolidation of Cingular Wireless and YELLOWPAGES.COM, will speed convergence, competition and continued innovation in the communications and entertainment industry, creating new solutions for consumers and businesses and positioned to lead the industry in one of its most signifi...
The telecommunications industry is of vital importance to the development of the information-based economy. AT&T need to supply access to cost efficient, timely and innovative telecommunications services.
In the 1990s, the telecommunications market was rapidly changing with the addition of new entrants from a competition standpoint that were forcing WorldCom to decrease prices. Long term leases for
Background One. Tel was launched by Jodee Rich and Brad Keeling in 1995 (Cook, 2001). At first, it looked to get the advantages from deregulation of the telecommunication industry by reselling other network’s capacity and making money through stock market speculation. Rich and Keeling tried to increase the company’s shares rather than profit the company (Cook, 2001). Initially, One.
By 2002-03, Indian market has grown highly competitive. Due to fall in ARPU (average monthly revenue per customer unit), players fought to capture new subscribers. With industry consolidation, the focus is switching from having a national footprint to the ability to provide value-added services. Opera...
Telecommunications gained mainstream attention in the early 90’s; however the initial key market was business men and women, who used their phones whilst being on the move and so allowing them to communicate with their companies with ease. Though in the modern era, telecommunication went through segmentation in the market trends, and now in this day and age it would be difficult to find someone who does not own some form of mobile technology. Many phone providers battle to provide the best service for their customers (Figure 1).
Success Factors for Growth in the Indian Telecom Market. In India’s highly competitive market, Bharti must be mindful of how to keep its core competencies ahead as well as trying to develop new ones.
Political factors: In India, there are very tough regulations put in place by the Indian govt. to avoid the monopoly conditions and govt. control remains at the top. This company is generally the state owned company therefore the decision making is very hard for the company and company has to follow the political changes which happen in the India. India has disputes with the Pakistan and China, which is continuously affecting the industry.
7- Fakharuddin, S. M., & Ahmed, M. (2009, August). Export promotion & import substitution. Retrieved from http://fakharb.blogspot.com/2012/04/export-promotion-or-import-substitution.html
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
Indicated by the exact meaning of the word, the term merger and acquisition(M&A) describes two different circumstances. A merger is the unification of two or more firms into a new one, while an acquisition is one company’s purchase of the majority of the shares from another (Bressmer 1989, Pausenberger 1990, Brauchlin 1990). A M&A is thus characterized by the fact that after unification there are fewer firms than before. After an acquisition, however, the target firm can either remain autonomous, or be partially or wholly integrated into the new parent company, although the firms remain independent entities from a legal point of view.